Wheaton strikes $175m streaming deal for Ethiopia’s first commercial gold mine
Wheaton Precious Metals (TSX, NYSE: WPM) has a struck a streaming deal with Allied Gold (TSX: AAUC) for the Kurmuk gold project in western Ethiopia.
Under the agreement, the Canadian streaming company will pay Allied $175 million in four equal installments. In return, Wheaton will receive 6.7% of the project’s payable gold, which will reduce to 4.8% after the delivery of 220,000 ounces. Wheaton will also pay 15% of the spot price of gold, while Allied retains an option to buy back the streaming deal.
Allied Gold said it would use the funds to develop Kurmuk, which is set to become Ethiopia’s first commercial gold mine. Production is expected to begin in mid-2026.
“The gold prepay is expected to be led by the lending syndicate for the company’s revolving credit facility with proceeds available to Allied following the completion of the stream financing,” Allied Gold chief executive Peter Marrone said in a statement.
The Kurmuk gold stream is forecast to yield an average of 16,000 ounces of gold annually during its first decade of operation.
The Kurmuk project, with an average life-of-mine production of 240,000 ounces of gold per year, includes the Dish Mountain and Ashashire deposits and spans a property of 1,450 km² with several exploration targets.
Development will follow a two-phase plan requiring a total capital investment of approximately $500 million. Phase 1, already underway, requires $155 million in 2024, while Phase 2 will begin in 2025.
The Kurmuk gold stream is forecast to yield an average of 16,000 ounces of gold annually during its first decade of operation.
Wheaton’s President and CEO, Randy Smallwood, described Kurmuk as a fully permitted, high-quality development with significant exploration potential.
“We are excited to partner with Allied to unlock opportunities that empower the local communities and help drive the growth of Ethiopia’s emerging metals and mining sector,” Smallwood said.
The deal is projected to increase Wheaton’s total estimated proven and probable gold reserves by 180,000 ounces, measured and indicated gold resources by 30,000 ounces, and inferred gold resources by 20,000 ounces.